if it is your opinion that this bet would allow excessive risks, then it is your responsibility as the owner/operator of MoneyPot to disallow such bets from being placed. As the owner/operator of MoneyPot, it is your responsibility to ensure that your bankroll investors are not exposed to excessive risk.
The problem is he (and probably all the investors) didn't know.
It is his responsibility to know. If this was something that he did not fully understand, then he should not have allowed these kinds of bets in the first place.
(AFAIK) dooglus, nor RHaver are the ones who own MoneyPot, therefore it is not their responsibility to make sure that bets do not expose MoneyPot bankroll investors to excessive risk
But then the same could be applied to the investors. On the investment page, there is a reminder "Never invest more than you are willing to lose, and do not invest unless you clearly understand the risks and rewards." and on the FAQ page, it tells investors "We use the generalized kelly criterion, to determine if a bet is acceptable or not". I do agree with you that it may not be the best idea for sites to completely follow Kelly formula in this case though.
Yup dooglus has nothing to do with MP while RHaver no longer owns it. What I was trying to say is that even the math gurus didn't realize the potential problem before it happened and I could understand why the current owners of MP didn't know the problem.